But last year, the state's Department of Revenue ruled that
existing statutes suggest homeowners who install solar panels on
their roofs are subject to a $140 surcharge on their
property taxes.

Last month, the department further clarified that only homeowners
who lease panels would face the tax — little comfort to those
taking part in the fastest-growing segment of residential solar
installations.

What prompted that first ruling remains unclear to this day.
Whatever its origins, it is still in place.

Today, TUSK, a pro-renewables conservative group whose members
include SolarCity and SunRun, launched its latest salvo in a
campaign to reverse the department's interpretation, releasing an
ad that calls on Arizona Gov. Jan Brewer to override the
department's ruling. The coalition also announced last week that
there will be a rally at the state capitol to protest the
interpretation.

"It's a terrible tax for
Arizona and a political gift for the Democrats," Barry Goldwater
Jr., the head of TUSK, says in the ad. A
recent TUSK-sponsored pollfound 77% of
Arizonans would be less likely to vote for an election
candidate if they proposed ending support for solar.

The utility industry's opposition to solar
has been well documented, but it seems to have grown most
intense in Arizona, where the solar industry has accused the
chairman of the state's electric utility, Don
Brandt, of personally lobbying in favor of a bill that would
codify the department's interpretation into law. The group that
owns the utility
spent more than $3 million last year on a campaign to peel
back solar subsidies. The utility argues non-solar customers are
hurt by the incentives.

We just wrote about how Barclays believes it's already too
late for utility companies to achieve anything more than
short-term speedbumps to solar adoption.

"While they may slow the penetration of solar, any relief
they offer utilities is likely to be short lived," lead author YC
Koh wrote in the firm's note. "In Arizona, the fee increases the
cost of a rooftop solar installation about 5%. With the costs of
solar installations falling about 10% per year, we expect the
pace of installations to recover before the end of 2014."